Doesn't the reserve, or sinking fund, cover the work that is required in some blocks?
Some residents have raised the possibility of using the reserve, or “sinking” fund, as a way of offsetting costs to residents.
All leaseholders contribute to the reserve fund for their block and plot. At East Village, the sinking fund is used for two main purposes, the long-term maintenance and repair of the blocks (lift renewal etc.) and shorter term projects such as the decoration programme. The fund is held by EVML on your behalf and audited annually. Some residents would like to draw on these funds for the fire safety work. However, using the sinking funds for the fire safety works would leave the fund unable to meet the future obligations to repair the blocks.
Can you confirm the requirement in my lease to pay for the cost of fire safety inspections and associated works?
You will be aware that the lease structure at East Village requires Triathlon Homes to pass on costs related to the upkeep and repair of the buildings and the mechanical equipment (such as lifts etc) to its sub-leaseholders. In addition, sub-leaseholders contribute to a sinking fund. This fund is kept for the long-term renewal and repair of the blocks including the renewal of mechanical and electrical equipment and the cyclical programme of redecoration.
Whilst your ‘sub-lease’ requires you to look after the internal demise of your apartment, the demise does not include the external walls or balcony: any repairs to the external wall systems and/or balcony must be carried out by EVML. The costs incurred by EVML in doing so are eligible service charge items, in the same way that maintenance and replacement of, for example, the lift is. Costs incurred by EVML relating to health and safety legislative requirements are also passed on to residents through the service charge, which includes costs relating to Fire Risk Assessments and lift inspections. As you are aware, EVML was required to carry out the external wall safety inspections to meet government guidance.
The legal position as detailed in the respective leases is that EVML charges the full service charge to Triathlon Homes and we then allocate the costs to you, as sub-leaseholders, based on the established service charge apportionment i.e. according to the floor area of each home. You might see these costs referred to as either ‘Outgoings’, ‘Block Service Charge’ or ‘Plot Service Charge’ in your sub-lease, depending on the nature of the costs incurred by EVML.
The extract from your sub-lease is as follows:
Outgoings (section 3)
To pay Outgoings.
To refund to the Landlord on demand (where Outgoings relate to the whole or part of the Building or other property including the Premises) a fair and proper proportion attributable to the Premises, such proportion to be conclusively determined by the Landlord (who shall act reasonably).
To pay a fair and reasonable proportion of the Interim Charge, the Block Services Costs Contribution, the Plot Services Costs Contribution and all other monies due pursuant to the Headlease in accordance with the Headlease or as the Landlord may reasonably direct.
We are taking legal advice about how to protect leaseholders, and ourselves, from any elements of the costs of fire safety works that might be required because of defects in the construction. It remains our intention to explore every avenue for funding before passing the cost of remediation on to leaseholders. For Tayberry House, Kotata House, Karner House, Meander House and Zeller House we have been successful in receiving government funding for the ACM removal and replacement. EVML has also submitted applications to the government’s Building Safety Fund (BSF) should further remedial work be required and for work in other blocks. The BSF does not cover the cost of removal of unsafe materials to balconies unless this is required to remediate the external wall system.
How can Triathlon Homes help me?
We are doing our best to complete our building safety programme at pace and carry out this work safely. If you are in hardship because of the timing of the programme for your building please speak to us. We want to support our residents and recognise that this is stressful time for many. There may be other options that we can discuss with you that could help.
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